Pharmaceuticals need to get smarter about using information technology to manage data. The alternative? Multimillion-dollar government penalties.

Schering-Plough will pay $250 million to the U.S. government this monththe first portion of a $500 million penaltyafter federal regulators found the drug giant violated dozens of manufacturing rules in the last several years.

Abbott Laboratories three years ago got nailed for $100 million for failing to address a string of violations the U.S. Food and Drug Administration (FDA) started to document five years prior.

These two companies are not alone when it comes to encountering shortcomings in the manufacturing process that could have been mitigated with the better use of information systems to collect, store and analyze data.

Other offenders include GlaxoSmithKline, which has received 54 FDA "warning letters" of factory problems since 1997 but has not been hit with a multimillion-dollar penalty. AstraZeneca has received 30 warnings; Bristol-Myers Squibb and Merck, 26 each. Nine companies, in fact, have received 15 or more FDA warnings to date since 1997.

It's not that drugmakers can't make drugs. The United States is said to have the safest supply in the world. The problem is that pharmaceutical companies don't have drug-making down to a scienceat least not according to the FDA, which oversees all aspects of the industry, from research to marketing.

Companies frequently and inexplicably deviate from federal rules, called Good Manufacturing Practices, and even from their own corporate procedures. Sometimes these are judgment mistakes, sometimes procedural. In most instances, the quality of the drugs isn't affected. But the fact that the FDA so regularly catches so many variances has spurred the agency to move with force against repeat sinners.

Many of the violations could be stopped with the smarter use of information technology, but it's not happening quickly enough. That's in part because pharmaceutical companies have instead spent most of their technology budgets on the upfront work of research and development and the testing of promising drugs. That's the most expensiveand competitivepart of the business.

Yet deficiencies in back-end manufacturing can mean lost sales: The FDA can and has shut down production when violations occur. As part of a consent decree signed last month, Schering-Plough, a $9.8 billion company, had to stop making 73 of its products.

Modern enterprise resource planning (ERP) and supply chain management software could help. Such software demands a degree of rigor in a company's business processes that sometimes isn't enforced well enough at pharmaceutical plants. The FDA often questions why employees don't use, or seem to know, an accepted practice. But software could enforce appropriate rules by, for example, not letting reports on random-sample testing be moved through the system without specific supervisor approvals.

Senior WriterKim_Nash@ziffdavisenterprise.comKim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.